Russo: Q-and-A with Donald Fehr

Blog Post by: Michael Russo

October 29, 2012 - 11:06 PM

Tonight at an Edina hotel, I sat down with Donald Fehr, the chief of the NHL Players’ Association, as more than 30 of the Minnesota-based NHL players, including many on the Wild, filed by us for dinner and a meeting.

Fehr arrived late in the afternoon, cabbed to the hotel and walked straight back to the ballroom for the meeting. He’s hoping to get on an early-morning flight back to Toronto because he already knows he won’t be able to get back to New York, where he lives north of Manhattan, because of Hurricane Sandy.

But Fehr felt it was incumbent upon him to travel to Minnesota on Monday because the players here asked for a meeting a week or so ago so they can be updated on the work stoppage and ask questions. Also in the meeting was Joe Reekie, the former NHL defenseman who is the divisional rep assigned to the Wild and eight other teams.

I talked with Fehr about the process, the core issues between the players and the owners, whether or not Fehr plans to go after the salary cap, how the union can justify fighting for 12.3 percent of salaries when players have already lost 27 percent this year and could potentially lose 100 percent, I asked him to respond to former union chief Paul Kelly’s ideas (expansion) for resolving the lockout in a Hockey News column today by Ken Campbell (link to Ken's piece down in the Q&A) and where we go from here.

Here’s a portion of my Q&A. The interview lasted about a half-hour, and like I said, this is just a portion because things went between formal and informal and because some of the things I talked to Fehr about will be in future articles I write in the upcoming days and weeks.

You can read the article that will be on www.startribune.com/wild soon, too, but a synopsis of where we're at in this excruciating lockout: We’re 45 days into the lockout, games have been canceled through Nov. 30, the Winter Classic will be canceled in a few days and in communication with Deputy Commissioner Bill Daly today, he told me there has already been $720 million in damage to revenue to a league that brought in $3.3 billion in revenue last year.

For quotes from Daly, see the bottom of the blog.

I will be on KFAN (100.3-FM) on Tuesday morning at 9:35 CT.

Here is Fehr:

Q: Where are we going from here?

A: I don’t know the answer, and believe me, I wouldn’t keep it to myself if I did.

Q: How frustrated are you with the process right now?

A: You’re always frustrated with a process that doesn’t produce an agreement. The longer it goes on, the more frustrating it becomes. From that sense, it’s not all that pleasant to deal with. On the other hand, this is the system we have in this country. Whether it’s wise or not, that’s an interesting subject. But we have this system. It doesn’t work all that well in sports for all kinds of reasons. It particularly doesn’t work well in the salary-cap sports because it almost guarantees a lockout in every negotiation. But you’ve got to plow through it until you get it done.

Q: Why does the system guarantee a lockout in “salary-cap sports?”

A: Doesn’t in baseball. The clubs come in and they say, ‘we have a percentage. Let’s lock them out and see if they’ll agree to lower the percentage and we’ll take back some of the money we agreed to pay them in the individual contracts and what the heck? We’re bigger and stronger and more powerful than they are.’ And you know that because whether it’s basketball or hockey or the NFL, where there’s no pretense for financial issues, it doesn’t matter. The bargaining strategy is precisely the same in all of them. It tells you it’s not about economics.

Q: What is the core issue here?

A: Well, first of all, why are we not playing? It wasn’t a decision the players made. We indicated from our first proposal they (the players) were willing to see their percentage fall over time. The owners first proposal went enormously backwards, so the movement they’ve made since then is from a proposal that nobody – not even them – took seriously to begin with. So you go into buy a car and let’s say it has a $35,000 sticker on it and you offer 15. The dealer laughs at you and says, ‘maybe 33.’ And you say, ‘No, I’ll improve my offer to 20. I improved it 33 percent.’ Well it still doesn’t mean it has any reasonable chance of success at any point. It’s an improvement off a number that had zero chance of success. And so you have to view their position from that standpoint. When we came in (August 14), we came in with a real offer from the beginning, what I had hoped for is a real negotiation. So far we haven’t had it.

Q: So, where do we go from here? Your entire career you fought against the salary cap. You’re not willing to go directly to 50-50 in a $3.3 billion business. Now revenues are declining, so I can’t imagine you’re going to take 50-50 in a $2.5 billion business or worse. Are you going after the salary cap?

A: The more things change, the harder it becomes. But I’m not going to talk about future contingencies in the event we can’t reach an agreement.

Q: You succeeded in baseball fighting the cap. You could have quite the legacy if you reversed the cap in hockey.

A: Look, I’m not going to discuss what we might do in other proposals down the road. We would still like to make an agreement and to negotiate from the proposals that we’ve made. We think they provide an excellent framework from which to do it. We gave them three different approaches to have the player share fall over time. It’s an eminently reasonable position, and their position seems to be to cut the share immediately, which has the effect of cutting the individual contracts, including one’s they just signed a few weeks ago. And you’ve got to wonder how somebody can look at themselves in the mirror when they do that.

Q: I always wonder and I think fans do, how do you justify fighting for 12.3 percent of a salary when you’re potentially risking the loss of 100 percent if we lose a season?

A: If this was a one-year agreement, that would make a lot of sense. But it’s not. It’s a five-or-six-or-seven-year agreement. Also, look at what’s on the table [from the owners], there’s a lot more that’s on the table in addition to just player share. They’re saying the things players got in the last agreement in return for the 24 percent rollback [and salary cap], they have to take it back. They (the players) lose ground in salary arbitration, they lose ground in free agency, lose ground in the entry-level system, contracts are limited in all kinds of ways that make them much less secure.

Q: Same kind of question. You’re fighting for $1.6 billion over six years. You could potentially lose that in player salary this year alone.

A: In theory, sure. Then, so do they.

Q: Why did you come here today with a hurricane heading for New York?

A: It’s their contract, it’s their futures, it’s their agreement and it’s their union, and I work for them. So I go wherever they want me to be. And when the guys say they wanted to have a meeting, I said sure. Absolutely.

Q: Are you worried about fractures in the union or players worried about lost wages? Are some players frightened?

A: Yeah. … But that doesn’t mean you make a bad agreement because of it.

(Russo note: I'll have more on the above subject in the coming days because some players are very worried).

Q: What will you talk to them about today?

A: What’s said it that room is said in confidence, but generally, I go through the proposals, go through why they were made, go through what you think will likely happen next or not, you try to take a pulse of the players, you remind them that a negotiation is a process of constant reevaluation and then you ask them what they want to do next and what other players saying. You invite them to negotiating meetings, executive board conference calls. It’s as inclusive as it gets.”

Q: Are you as confident as the league seems to be that fans will just come back?

A: I never take the fans for granted. It seems to me that anybody that does is foolish.

Q: Ken Campbell from the Hockey News wrote a column today where he quotes former union head Paul Kelly saying the key to resolving this is expansion to Quebec City and southern Ontario, splitting the expansion fees, growing revenues and making up the difference right there (see Ken’s column here). Have you talked to the league about expansion?

A: We asked them if they have any plans for expansion, if it’s even on the calendar or anything like that, and they’ve said no.

Q: Do you believe the owners are as resolute as the players?

A: That’s something that will become obvious. I assume they mean what they say.

Q: Have you talked to the players about potentially losing a season?

A: You prepare them for all eventualities. You always have a concern. But I still would like to believe that the owners would like to operate the business. We’ll see.

Q: How upset are you that the owners have declined returning to the table at your request with no preconditions?

A: It’s frustrating. I can’t make ‘em. Haven’t got a tank. What we have to do is get back to the table and figure out a way to bridge it … if they’re willing.

Q: How do you stay so even-keeled when most of us are freaking out?

A: Can’t do this and ride an emotional rollercoaster.

As I mentioned, I communicated with Bill Daly, the league’s No. 2 to Gary Bettman, today:

“Seems like we are back at Square One. We offered 50-50 and they responded at dramatically higher numbers.

“They asked us to amend our player contracting proposals, even without a counter proposal to our original bargaining proposal. We gave it to them -- cutting system-related adjustments to a bare minimum. Apparently, none of our revised proposals are acceptable to the PA.

“We gave on HRR (hockey-related revenue) definitions, we moved again in their direction on revenue sharing, we gave them appeal rights to a neutral third party for certain on-ice and off-ice discipline, we confirmed no roll-back in salaries, and we offered a ‘make-whole’ that we indicated a willingness to negotiate over.

“Not sure what we do now. It’s clear to us that if the PA always wanted a long lockout, they certainly have been successful in creating an environment to successfully achieve one.”

(Russo note: Sorry if there are typos in here. I'll fix at home. But I'm getting booted from the Galleria's Starbucks, partially because they're closing, but also because I made them run out of coffee).